The Egyptian General Petroleum Corporation (EGPC) is negotiating with the Kuwait Petroleum Corporation (KPC) to renew a contract to supply 3m barrels of crude oil to Egypt per month with payment facilitations for the value of the shipments.
The contract is expected to be finalised by the conclusion of next September.
A prominent government official said, in exclusive statements to Daily News Egypt, that EGPC aims to renew the contract with Kuwait because it is very valuable for Egypt in light of declining Brent prices, and helps the country exploit surplus refining capabilities in Egyptian labs.
Kuwaiti crude oil is refined and petroleum derivatives. such as gasoline, diesel, and fuel oil, are produced and supplied to help meet the needs of the domestic market. KPC currently supplies the Egyptian market with 3m barrels of crude oil per month, as well as shipments of diesel and jet fuel valued at $1.2bn annually.
Kuwait supplies Egypt with 2m barrels of crude oil per month with facilitations for nine months to pay the value of the shipment, the official said, and a contract was signed to supply an additional 1m barrels with a one month facilitation only.
The contract to supply the oil would end next September and Egypt would import crude oil from Kuwait according to global Brent prices at the time shipments are imported. There is no fixed price for the contracts and no interest is added to the value.
The official said diesel fuel and jet fuel supplied was worth $1.2bn annually and that the shipments are paid for three months after they arrive.
If crude quantities supplied from Kuwait exceed domestic need, they will either be refined in labs and the derivatives sold on global markets, or the crude will be stored in Egyptian warehouses and then sold through the Sidi Krir port.
He said EGPC is working on exploiting the productive capacity of refineries by importing crude oil and refining it in Egyptian factories in order to save fuel on the local market.
KPC is close to launching a representative office in Egypt, which will form a marketing centre for their production of crude oil for the countries of North Africa and the Mediterranean.
The official said EGPC agreed with KPC to establish an office in Egypt to market its crude oil production as part of a plan to make Egypt a centre for logistics, marketing, and petroleum product storage for the company.
Local production of gasoline amounts to 6.1m tonnes annually, with 80-octane gasoline accounting for close to half of this figure with a total of 2.7m tonnes, 92-octane gasoline approximately 2.5m tonnes, and 95-octane gasoline 400,000 tonnes, according to estimates made during FY 2015/2016.
Egypt’s total production of crude oil is 695,000 barrels per day according to a report issued by OPEC. Kuwait sells approximately 1.995m barrels of crude oil daily in global markets, with production reaching 2.867m barrels of crude oil.